Companies embracing change and innovation are building a culture of innovation: a work environment cultivated by leaders to nurture new thinking, apply new processes and encourage innovation to drive long-term value for the business. Digital transformation is occurring at a rapid pace, creating a more connected world and providing new opportunities for companies to grow. Creating a culture of innovation is an investment in the future of any business.
In times of organizational and industry transformation, current and future leaders must be open to change and ready to take opportunistic risks. Adaptability continues to be a critical element. Yet in the digital age, leaders must also unleash talents quickly. Developing a culture of innovation requires an organizational mindset that enables individual employee contributions. The process is not easy, however with the right approach, a business can maintain its commitment to continuous improvement while driving a sustainable competitive advantage to achieve short and long term ROI. In conclusion, an organizational culture should produce measurable and quantifiable change more than just an abstract concept.
In culture of transformation, companies focus on the following:
- Industry leaders achieve 70% greater productivity increase from investment in new technology than industry followers do at 30%.
- Companies allocating 25 percent or more of their R&D budgets to software and services (vs. products) report faster revenue growth than their competitors.
- Companies with formal innovation system and structure in place see yields: 51 percent are first to market.
- 34 percent of business leaders have seen a positive impact from their own digital transformation.
The key is in the execution. Organizations must be clear in building the right culture in order to make changes happen. Employees will not be able to make changes if they are punished for risk-taking. Corporate websites cannot be filled with statements about valuing innovation if the organization is solely focused on cost-cutting to produce short-term results. Instead, organizations should focus more on the long-term results.
Establishing a culture of innovation may have different speed depending on the organization and the industry. In any industry, innovating and adapting is a baseline expectation in today's transforming business environment. Investing in innovation and culture will prepare any organization for its digital future. If it is done well, the return can be significant and rapid.